Drilling for extended well testing commenced on Alta

Drilling for extended well testing commenced on Alta

09 April 2018

Lundin Petroleum AB (Lundin Petroleum) is pleased to announce that its wholly owned subsidiary Lundin Norway AS (Lundin Norway) has commenced drilling well 7220/11-5 on the Alta discovery in PL609 in the southern Barents Sea. Following drilling, the well will be used for extended well testing.

The Alta discovery is located in PL609 in the southern Barents Sea, approximately 160 km from the Norwegian coastline. The discovery was made in 2014 and three successful appraisal wells have been completed to date. The adjacent Gohta discovery located in PL492 is considered a possible joint development opportunity together with the larger Alta discovery. The combined gross contingent resource range for the Alta and Gohta discoveries is estimated to between 115 and 390 MMboe.

A 700 metres long horizontal well will be drilled in the oil zone, which will improve the lateral geological understanding of the Permian-Triassic karstified and fractured carbonate reservoirs. The main objectives of the extended well test is to prove sustainable production rates and reduce the uncertainty around the recovery mechanism in this reservoir to provide the basis to progress development studies.

The semi-submersible drilling rig Leiv Eiriksson will be used for the drilling and testing at Alta. The well will be tested through the rig for about two months and the produced volumes will be flowed via a flexible flowline to a tanker. At the end of the test, the oil and water produced to the tanker will be delivered to the Mongstad oil terminal on the west coast of Norway. A successful outcome of the extended well test will provide important information to progress further appraisal drilling and field development activities. Drilling and testing is expected to take 140 days.

Lundin Norway is the operator of PL609 with a 40 percent working interest. The partners are DEA Norge AS and Idemitsu Petroleum Norge AS with 30 percent working interest each.

 

Invitation to the AGM of Lundin Petroleum

Invitation to the AGM of Lundin Petroleum

29 March 2018

The shareholders of Lundin Petroleum AB are hereby given notice of the Annual General Meeting of Shareholders to be held on Thursday 3 May 2018 at 1 p.m. (Swedish time). Location: Vinterträdgården at Grand Hôtel, Södra Blasieholmshamnen 8, in Stockholm. The Annual General Meeting will be translated from Swedish to English and from English to Swedish.

Attendance at the Annual General Meeting

Shareholders wishing to attend the Annual General Meeting shall:

  • be recorded in the share register maintained by Euroclear Sweden AB on Thursday 26 April 2018; and
  • notify Lundin Petroleum of their intention to attend the Annual General Meeting no later than Thursday 26 April 2018 through the website lundin-petroleum.com (only applicable to individuals) or by mail to Computershare AB, “Lundin Petroleum AB’s AGM”, P.O. Box 610, SE – 182 16 Danderyd, Sweden, by telephone Int +46-8-518 01 554 or by e-mail info@computershare.se.

Shareholders whose shares are registered in the name of a nominee must temporarily register, through the nominee, the shares in their own names in order to be entitled to attend the Annual General Meeting. Such registration must be effected by Thursday 26 April 2018.

Shareholders may attend the Annual General Meeting through a proxy. A shareholder shall in such a case issue a written and dated proxy signed by the shareholder. Proof of authorisation (through a certificate of registration or similar) shall be attached to proxies issued by legal entities. A proxy form is available on
www.lundin-petroleum.com and will be sent to shareholders upon request. To facilitate registration at the Annual General Meeting, proxy forms, certificates of registration and other documents of authority should be submitted to the Company at the address above in good time prior to the Meeting.

Proposed agenda

  1. Opening of the Annual General Meeting.
  2. Election of Chairman of the Annual General Meeting.
  3. Preparation and approval of the voting register.
  4. Approval of the agenda.
  5. Election of one or two persons to approve the minutes.
  6. Determination as to whether the Annual General Meeting has been duly convened.
  7. Speech by the Chief Executive Officer.
  8. Presentation of the annual report and the auditor’s report, the consolidated financial statements and the auditor’s Group report.
  9. Resolution in respect of adoption of the income statement and the balance sheet and the consolidated income statement and consolidated balance sheet.
  10. Resolution in respect of disposition of the Company’s result according to the adopted balance sheet and determination of record date for dividend.
  11. Resolution in respect of discharge from liability of the members of the Board of Directors and the Chief Executive Officer.
  12. Presentation by the Nomination Committee:
  • Proposal for the number of members of the Board.
  • Proposal for election of Chairman of the Board and other members of the Board.
  • Proposal for remuneration of the Chairman and other members of the Board.
  • Proposal for election of auditor.
  • Proposal for remuneration of the auditor.Resolution in respect of the number of members of the Board

13. Resolution in respect of the number of members of the Board.

14. Resolutions in respect of Board members:

  1. Re-election of Peggy Bruzelius as a Board member;
  2. re-election of C. Ashley Heppenstall as a Board member;
  3. re-election of Ian H. Lundin as a Board member;
  4. re-election of Lukas H. Lundin as a Board member;
  5. e-election of Grace Reksten Skaugen as a Board member;
  6. re-election of Alex Schneiter as a Board member;
  7. re-election of Cecilia Vieweg as a Board member;
  8. re-election of Jakob Thomasen as a Board member;
  9. election of Torstein Sanness as a Board member and
  10. re-election of Ian H. Lundin as the Chairman of the Board.

15. Resolution in respect of remuneration of the Chairman and other members of the Board.
16. Election of auditor.
17. Resolution in respect of remuneration of the auditor.
18. Resolution in respect of the 2018 Policy on Remuneration for Group Management.
19. Resolution in respect of the 2018 Long-term, Performance-based Incentive Plan.
20. Resolution to authorise the Board to resolve on new issue of shares and convertible debentures.
21. Resolution to authorise the Board to resolve on repurchase and sale of shares.
22. Closing of the Annual General Meeting.

Proposals for resolutions to be presented at the Annual General Meeting of Lundin Petroleum AB on Thursday 3 May 2018 in Stockholm

Resolution in respect of disposition of the Company’s result (item 10)

The Board proposes that a cash dividend of SEK 4.00 per share be declared for the financial year 2017.

The Board further proposes that the record date of the dividend payment shall be 7 May 2018. If the Annual General Meeting resolves in accordance with the Board’s proposal, the dividend is expected to be paid out on 11 May 2018 through Euroclear Sweden AB.

Resolutions in respect of Chairman of the Annual General Meeting, number of Board members, election of Chairman of the Board and of other members of the Board, fees payable to the Chairman of the Board and other members of the Board, election of auditor and fees payable to the auditor (items 2 and 13-17)

Lundin Petroleum AB’s Nomination Committee for the 2018 Annual General Meeting, consisting of Ian H. Lundin (Nemesia Sàrl and Landor Participations Inc., as well as Chairman of the Board), Åsa Nisell (Swedbank Robur Fonder), Hans Ek (SEB Investment Management AB) and Filippa Gerstädt (Nordea Funds), appointed by shareholders jointly holding approximately 32.7 percent of the voting rights for all the shares in Lundin Petroleum AB as per 1 August 2017, proposes the following:

  • Advokat Klaes Edhall to be appointed as Chairman of the Annual General Meeting.
  • Nine members of the Board to be appointed without deputy members.
  • Re-election of Peggy Bruzelius, C. Ashley Heppenstall, Ian H. Lundin, Lukas H. Lundin, Grace Reksten Skaugen, Alex Schneiter, Cecilia Vieweg and Jakob Thomasen as members of the Board and election of Torstein Sanness as a new member of the Board for a period until the end of the 2019 Annual General Meeting. Torstein Sanness was born in 1947 and is a Norwegian citizen. Mr. Sanness was formerly Managing Director of Lundin Norway AS from 2004 until his retirement in April 2015. Mr. Sanness also served as Chairman of Lundin Norway AS from April 2015 to March 2017. From 2000 to 2004, he served as Managing Director of Det Norske Oljeselskap AS and from 1972 to 2000, he served in various capacities with Saga Petroleum, where he held several executive positions globally. Mr. Sanness is a graduate of the Norwegian Institute of Technology where he obtained a Master of Engineering in geology, geophysics and mining engineering. Mr. Sanness is well respected within the Norwegian oil and gas industry given his extensive experience, and his competencies include profound knowledge and understanding of the Norwegian oil and gas industry, coupled with detailed technical knowledge and good relationships with industry stakeholders in general. Mr. Sanness is currently a Board member of International Petroleum Corporation, Panoro Energy ASA, Sevan Marine ASA and TGS Nopec ASA.
  • Re-election of Ian H. Lundin as Chairman of the Board for a period until the end of the 2019 Annual General Meeting.
  • Remuneration of the members of the Board of Directors and the Chairman of the Board of Directors, including in respect of Committee membership, to be as follows: (i) annual fees of the members of the Board of Directors of SEK 525,000 (excluding the Chairman of the Board of Directors and the Chief Executive Officer as a Board member); (ii) annual fees of the Chairman of the Board of Directors of SEK 1,100,000; (iii) annual fees for Committee members of SEK 110,000 per Committee assignment (other than Committee Chairs); (iv) annual fees for Committee Chairs of SEK 165,000; (v) annual fees for the CR/HSE Board representative of SEK 165,000; with the total fees for Committee work, including Committee Chair and CR/HSE Board representative fees, not to exceed SEK 1,155,000.
  • Re-election of the registered accounting firm PricewaterhouseCoopers AB as the auditor of the Company, which intends to appoint authorised public accountant Johan Rippe as the auditor in charge, for a period until the end of the 2019 Annual General Meeting.
  • The auditor’s fees shall be payable upon approval of their invoice.

Resolution in respect of the 2018 Policy on Remuneration for Group Management (item 18)

The Board’s proposal for the 2018 Policy on Remuneration for Lundin Petroleum’s Group Management, which consists of the President and Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and Vice President level employees, entails that it is the aim of Lundin Petroleum to recruit, motivate and retain high calibre executives capable of achieving the objectives of the Group, and to encourage and appropriately reward performance that enhances shareholder value. Accordingly, the Group operates a Policy on Remuneration which ensures that there is a clear link to business strategy and a close alignment with shareholder interests and current best practice, and aims to ensure that Group Management is rewarded fairly for its contribution to the Group’s performance.

There are four key elements to the remuneration package of Group Management: a) Base salary; b) Yearly variable salary; c) Long-term Incentive Plan (LTIP); and d) Other benefits.

The 2018 Policy on Remuneration also provides for mutual notice periods on termination of employment and for severance arrangements in the event of termination of employment due to a change of control of the Company, where employment is terminated by the Company without cause, or otherwise in circumstances at the discretion of the Board.

In addition, remuneration as per prevailing market conditions may be paid to members of the Board of Directors for work performed outside the directorship.

The proposed 2018 Policy on Remuneration for Group Management is available on
www.lundin-petroleum.com.

Resolution for the 2018 Long-term, Performance-based Incentive Plan (item 19)

The Board of Directors proposes that the Annual General Meeting resolve to establish a long-term, performance-based incentive plan (“LTIP 2018”) in respect of Group Management and a number of key employees of Lundin Petroleum, which follows the same principles as the long-term, performance-based incentive plan (“LTI”) approved by the 2014 – 2017 Annual General Meetings and which is based on the guidelines and the principal terms and conditions set out below.

The primary reason for establishing LTIP 2018 is to align the interests of Group Management and other key employees with the interests of the shareholders, and to provide market appropriate reward reflecting performance and commitment.

In order to be eligible to participate in future LTI plans, each participant needs to build towards a meaningful shareholding in Lundin Petroleum, meaning that a certain portion of any allotted shares pursuant to LTIP 2018 (and any future LTI plans) shall be retained until the required level of shareholding has been met.

Awards under LTIP 2018 are proposed to be made to approximately 16 permanent employees of the Lundin Petroleum Group (the “Participants”), comprising the Chief Executive Officer and other members of Group Management as well as certain other key employees within the Lundin Petroleum Group. The Board of Directors may, within the total number of shares available under LTIP 2018, invite a limited number of additional Participants in LTIP 2018 following recruitment to the Lundin Petroleum Group.

LTIP 2018 gives the Participants the possibility to receive shares in Lundin Petroleum subject to uninterrupted employment and to the fulfilment of a performance condition over a three year performance period normally commencing on 1 July 2018 and expiring on 30 June 2021 (the “Performance Period”). The performance condition (the “Performance Condition”) is based on the share price growth and dividends (“Total Shareholder Return”) of the Lundin Petroleum share compared to the total shareholder return of a peer group of companies (the “Peer Group”). At the beginning of the Performance Period, the Participants will, free of charge be granted awards (“LTIP Awards”) which, provided that i.a. the Performance Condition is met, entitle the Participant to be allotted, also free of charge, shares in Lundin Petroleum (“Performance Shares”) as soon as reasonably practicable following the end of the Performance Period.

The LTIP Award (i.e. the number of Performance Shares that a Participant may be allotted following the expiration of the Performance Period, provided that i.a. the Performance Condition is met) to be awarded to each Participant shall be calculated as follows:

LTIP Award = A multiplied by B divided by C, where

A is the Participant’s monthly gross base salary applicable as at the date of grant of the LTIP Award;

B is a number of months as determined by the Board of Directors in respect of each Participant, taking into account such factors as industry benchmarking and the Participant’s position within the Lundin Petroleum Group (but in any case, not exceeding 36 months); and

C being the average closing price of the Lundin Petroleum share on Nasdaq Stockholm for the three month period immediately prior to the Performance Period (the “Initial Share Price”).

Fractions of Performance Shares shall be rounded-off to the immediate lower whole number.

Assuming a share price of the Lundin Petroleum share as of 28 March 2018 of SEK 211.4, the total number of Performance Shares that may be allotted under LTIP 2018 as at the date of award (assuming 100 per cent vesting) is approximately 343,000, corresponding to approximately 0.1 per cent of the current total number of shares and votes in Lundin Petroleum. Since LTIP Awards are intended to be awarded in July 2018 and the share price of the Lundin Petroleum share may fluctuate until the Initial Share Price is determined, and considering additional Participants following recruitment, the total number of Performance Shares under LTIP 2018 as at the date of award may not exceed 460,000.

Allotment of Performance Shares will be determined by the Board of Directors after the expiration of the Performance Period on the basis of LTIP Awards made and is conditional on (i) the Participant retaining his or her uninterrupted employment in the Lundin Petroleum Group until the expiry of the Performance Period and (ii) the Performance Condition having been met. The Board of Directors may reduce (including reduce to zero) allotment of Performance Shares at its discretion, should it consider the underlying performance not to be reflected in the outcome of the Performance Condition, for example, in light of operating cash flow, reserves, and health and safety performance.

A minimum and a maximum level for the Performance Condition to be fulfilled have been established by the Board of Directors. In order for the LTIP Awards to give entitlement to the maximum number of Performance Shares, the maximum level for the Performance Condition must have been fulfilled. Where the level of fulfilment is between the minimum and maximum levels, allotment will occur on a linear basis.

The Participants will not be entitled to transfer, pledge or dispose of the LTIP Award or any rights or obligations under LTIP 2018, or exercise any shareholders’ rights regarding the LTIP Awards during the Performance Period.

Recalculation of the Performance Condition and the LTIP Awards, including the number of Performance Shares allotted, shall take place in the event of an intervening dividend in kind, bonus issue, split, preferential rights issue and/or other similar corporate events.

The Board of Directors will be entitled to adopt different terms and conditions for LTIP 2018 regarding, among other things, the Performance Period and allotment of Performance Shares in the event of commencement or termination of employment during the Performance Period, e.g. due to new recruitments, illness, disability, death, redundancy, contractual retirement and other exceptional circumstances determined by the Board of Directors.

The LTIP Awards entitle Participants to acquire already existing Lundin Petroleum shares. The Board of Directors will consider means to secure the Company’s expected financial exposure related to LTIP 2018. One method would be to enter into an equity swap agreement with a third party on terms in accordance with market practice, whereby the third party in its own name shall be entitled to acquire and transfer shares in Lundin Petroleum to the Participants.

The maximum cost for granting LTIP Awards under LTIP 2018 (assuming 100 per cent vesting), excluding costs related to delivery of the Performance Shares, is approximately USD 8.8 million (approximately SEK 72.5 million), excluding social security charges. On this basis, the maximum cost for social security charges is estimated to be approximately USD 0.9 million (approximately SEK 7.4 million) assuming 100 per cent vesting. 

The Board of Directors proposes that the Annual General Meeting resolves in accordance with the Board of Directors’ proposal to establish LTIP 2018. A valid resolution requires a simple majority of the votes cast.

A more detailed description of the Board’s proposal for the 2018 LTIP is available on www.lundin-petroleum.com. 

Resolution to authorise the Board to resolve on new issue of shares and convertible debentures (item 20)

The Board proposes that the Board is authorised to decide, at one or more occasions until the next Annual General Meeting:

  • to issue no more than 34,000,000 new shares with consideration in cash or in kind or by set-off or otherwise with conditions and thereby be able to resolve to disapply the share­holders pre-emption rights. To the extent the new shares are issued with disappli­cation of the shareholders pre-emption rights they shall be issued at a subscription price that closely corresponds to the market price of the shares at the time of the issue; and
  • to issue convertible debentures with consideration in cash or in kind or by set-off or otherwise with conditions and thereby be able to resolve to disapply the share­holders pre-emption rights, where the number of shares that may be issued after conversion must not exceed 34,000,000. To the extent the convertible debentures are issued with disappli­cation of the shareholders pre-emption rights they shall be issued at a subscription price that closely corresponds to market value based on the market price of the shares at the time of the issue of the convertible debentures.

The reason for disapplying the shareholders’ pre-emption rights is to enable Lundin Petroleum to make business acquisitions or other major investments. The total number of shares that can be issued based on the proposed authorisations under (i) and (ii) may not together exceed 34,000,000. If the authorisation is exercised in full for issues with deviation from the shareholders’ pre-emption rights, the dilution effect is approximately ten percent.

This proposal requires the affirmative support of shareholders holding at least two thirds of the votes given for this resolution and of the shares represented at the Annual General Meeting.

Resolution to authorise the Board to resolve on repurchase and sale of shares (item 21)

The Board proposes that the Board is authorised, during the period until the next Annual General Meeting, to decide on repurchases and sales of Lundin Petroleum shares on Nasdaq Stockholm (the “Exchange”). The maximum number of shares repurchased shall be such that shares held in treasury from time to time do not exceed ten percent of all shares of the Company. The maximum number of shares that may be sold is the number of shares that the Company at such time holds in treasury. Repurchase and sale of shares on the Exchange may take place only at a price within the spread between the highest bid price and lowest ask price as registered from time to time on the Exchange. The repurchases and sales shall be made in accordance with the provisions concerning the purchase and sale of a company’s own shares under applicable stock exchange rules and other applicable rules and regulations.

The purpose of the authorisation is to provide the Board with an instrument to optimise Lundin Petroleum’s capital structure and thereby create added value for the shareholders, to secure Lundin Petroleum’s obligations under its incentive plans and to cover costs, including social security charges, that may arise as a result of the LTIP programs of the Company.

This proposal requires the affirmative support of shareholders holding at least two thirds of the votes given for this resolution and of the shares represented at the Annual General Meeting. 

Further information

Lundin Petroleum AB’s share capital amounts to SEK 3,478,713.38, represented by 340,386,445 shares. Each share carries one vote. Lundin Petroleum AB holds, as per 29 March 2018, 1,873,310 own shares. The Company’s Articles of Association are available on www.lundin-petroleum.com.

The Board and the Chief Executive Officer shall, if a shareholder so request and the Board considers that it may do so without significant damage to the Company, give information at the Annual General Meeting regarding circumstances that could affect the assessment of an item on the agenda and circumstances that could affect the assessment of the Company’s or a subsidiary’s financial situation. The duty to give information also applies to the Company’s relationship with another Group company and the consolidated financial statements.

The Chief Executive Officer’s speech will be available on www.lundin-petroleum.com after the Annual General Meeting.

Members of Lundin Petroleum’s Group Management will be available before and after the Annual General Meeting to discuss the business and operations of the Company and to answer questions from shareholders. 

Additional documentation

The following documentation is further available at Lundin Petroleum’s office (Hovslagargatan 5 in Stockholm) and on www.lundin-petroleum.com:

  • The Nomination Committee’s complete proposal regarding items 2 and 13-17, including a reasoned statement regarding the proposal for the Board.
  • Lundin Petroleum AB’s annual report, which includes the financial statements and the audit report.
  • The Board’s proposal for a dividend distribution.
  • The Board’s statement pursuant to the Swedish Companies Act Chapter 18, Section 4 in respect of the dividend distribution.
  • The statement of the auditor regarding the application of guidelines for remuneration as per the Swedish Companies Act Chapter 8, Section 54.
  • The Board’s report on the evaluation of remuneration of Group Management in 2017.
  • The Board’s proposal for the 2018 Policy on Remuneration for Group Management.
  • The Board’s proposal for the 2018 LTIP.
  • The Board’s proposal to authorise the Board to resolve on repurchase and sale of shares.
  • The Board’s statement pursuant to the Swedish Companies Act Chapter 19, Section 22 in respect of the authorisation to purchase and sell own shares.
  • The Board’s proposal to authorise the Board to resolve on new issue of shares and convertible debentures.
  • A proxy form.

All documents will be sent to shareholders free of charge upon request if their postal address is provided.

 

Stockholm in March 2018

LUNDIN PETROLEUM AB (publ)

The Board of Directors

 

2018 AGM web registration

2018 AGM page

Lundin Petroleum publishes Annual and Sustainability Reports for 2017

Lundin Petroleum publishes Annual and Sustainability Reports for 2017

29 March 2018

Lundin Petroleum AB (Lundin Petroleum) is pleased to announce that the Annual and Sustainability Reports for 2017 have been published and are now available to download on www.lundin-petroleum.com

2017 was an inflection year for Lundin Petroleum with record high operating cash flow leading to free cash flow generation for the first time since 2011. The exceptional operational performance during 2017, combined with an improving macro environment, has positioned the Company to start distributing cash dividends while at the same time leaving capacity to continue to fund an active organic growth strategy.

Sustainable value creation for Lundin Petroleum means developing oil and gas in a responsible, economical and carbon efficient manner. Efforts continued in 2017 to reduce emissions throughout the operations, resulting in a carbon intensity level that is among the lowest in our industry. The Sustainability Report provides comprehensive information on how climate change and other sustainability issues are part of Lundin Petroleum’s business model to create sustainable long-term value.

Both reports are available to download from Lundin Petroleum’s website. Shareholders who wish to receive a printed copy of the annual report can request it on the website or by contacting us directly on telephone +46 8 440 54 50 or email info@lundin.ch

 

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Annual report 2017
29.03.2018, 2.16 MB

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Sustainability report 2017
29.03.2018, 2.35 MB

Successful appraisal well on Luno II

Successful appraisal well on Luno II

26 March 2018

Lundin Petroleum AB (Lundin Petroleum) is pleased to announce that its wholly owned subsidiary Lundin Norway AS (Lundin Norway) has successfully completed the Luno II appraisal well 16/4-11 in PL359 on the Utsira High in the Norwegian North Sea.

The appraisal well was located approximately 2.5 km south of the original Luno II discovery well and is the fifth well on the Luno II oil discovery. The main objective of the appraisal well was to prove additional resources in the Luno II discovery to progress to development.

The appraisal well encountered a gross oil column of 22 metres in Triassic sandstone with very good reservoir quality, which is significantly better than expected. The oil-water contact was encountered at 1,947 metres below the sea surface. The entire reservoir, including the water zone, consists of sandstones with some conglomeratic sandstone intervals with a total thickness of about 400 metres. Extensive data acquisition and sampling have been carried out in the reservoir, including conventional coring and fluid sampling.

Following these positive well results, the previous gross resource range for the Luno II discovery of 30 to 80 MMboe has been increased to between 40 and 100 MMboe. Development studies for Luno II will now be progressed with the objective of submitting a PDO around the end of 2018. The development concept for Luno II is a subsea tie-back to the nearby Edvard Grieg platform.

Lundin Norway is the operator of PL359 with a 50 percent working interest. The partners are OMV with 20 percent and Statoil and Wintershall with 15 percent each.

After completion of the Luno II appraisal well, the semi-submersible drilling rig COSL Innovator will proceed to drill appraisal well 16/1-28S on the nearby Rolvsnes oil discovery in PL338C. The main objective is to confirm commercial rates from a horizontal well that will be drilled in fractured and weathered basement reservoirs similar to the reservoirs currently producing in the northern area of the Edvard Grieg field. Rolvsnes is also considered a potential tie-back development to Edvard Grieg and success will further de-risk the larger area prospectivity, estimated to contain gross resources of more than 200 MMboe. Drilling and testing at Rolvsnes is expected to take 115 days.

Lundin Norway is the operator of PL338C with a 50 percent working interest. The partners are Lime Petroleum with 30 percent and OMV with 20 percent.

 

 

Capital Market Day 2018

Capital Market Day 2018

8 February 2018

Lundin Petroleum AB (Lundin Petroleum) is pleased to announce that the annual Capital Market Day will be held in Oslo, Norway on Monday 12 February 2018.

Lundin Petroleum’s Capital Market Day starts at 14.15 CET and can be followed via a live webcast at www.lundin-petroleum.com. The presentation will be available on the website immediately before the start of the event.

Link to Webcast

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Capital Market Day 2018
08.02.2018, 151.64 KB

Johan Sverdrup update

Johan Sverdrup update

7 February 2018

Lundin Petroleum AB (Lundin Petroleum) is pleased to announce that the Johan Sverdrup development project continues to improve.

Phase 1 of the Johan Sverdrup project continues to progress according to plan and is now close to 70 percent complete. A summary of the positive update provided by Statoil earlier this morning is presented in the table below:

 

Updated guidancePrevious guidance
Resource range2.1–3.1 billion boe2.0–3.0 billion boe
Capital expenditure Phase 1 (nominal)NOK 88 billionNOK 92 billion
Capital expenditure Phase 2 (nominal)<NOK 45 billionNOK 40–55 billion
Full field breakeven price<USD 20 per barrel<USD 25 per barrel

 

Alex Schneiter, CEO and President of Lundin Petroleum comments:

“With the good progress on the Johan Sverdrup project it is encouraging to see that the partnership has managed to reduce costs even further. Phase 1 costs have now been reduced by close to 30 percent since the PDO, excluding additional foreign exchange rate savings. This improvement, in combination with the resource upgrade for the field, truly shows what a world class asset Johan Sverdrup is and I am particularly pleased to see further tangible evidence of this from Statoil’s announcement today.”

Lundin Norway has a 22.6 percent working interest in the Johan Sverdrup field and Statoil is operator with 40.0267 percent. The remaining partners are Petoro with 17.36 percent, Aker BP with 11.5733 percent and Maersk Oil with 8.44 percent.

 

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Johan Sverdrup update
07.02.2018, 70.47 KB

Year end report 2017

Year end report 2017

1 February 2018

Lundin Petroleum reports excellent results for 2017. Full year production at record level and at low cash operating costs resulted in highest operating cash flow and EBITDA to date. Following these strong results, Lundin Petroleum’s Board of Directors proposes an inaugural cash dividend to be paid after the 2018 AGM.

· Continued strong production from the Edvard Grieg field and the Alvheim area due to strong facilities and reservoir performance.
· Full year cash operating costs of USD 4.25 per barrel, including netting off tariff income.
· Johan Sverdrup project on schedule with over 65 percent of Phase 1 completed by end of 2017.
· Increase of proved plus possible reserves to 726.3 MMboe with a reserves replacement ratio of 144 percent.
· Record high award of 14 exploration licences in the 2017 Norwegian APA licensing round.
· The Board of Directors proposes to the 2018 AGM an inaugural cash dividend for 2017 of SEK 4.00 per share (approximately MUSD 175).

 

Financial summary
Continuing operations
1 Jan 2017-
31 Dec 2017
12 months
1 Oct 2017-
31 Dec 2017
3 months
1 Jan 2016-
31 Dec 2016
12 months
1 Oct 2016-
31 Dec 2016
3 months
Production in Mboepd86.183.159.371.1
Revenue in MUSD1,997.0593.7950.0326.2
EBITDA in MUSD1,501.5429.8752.5276.7
Operating cash flow in MUSD1,530.0434.5857.9300.9
Net result in MUSD380.9-50.9-399.3-662.7
Earnings/share in USD11.13-0.15-0.79-1.54
Earnings/share fully diluted in USD11.13-0.15-0.79-1.53
Net debt3,883.63,883.64,075.54,075.5

 

The numbers included in the table above are based on continuing operations (including 2016 comparatives)
1 Based on net result attributable to shareholders of the Parent Company


Comments from Alex Schneiter, President and CEO of Lundin Petroleum:

“Looking back on the full year results for 2017 it is pleasing to report a record setting performance for Lundin Petroleum. With a continued strong performance in the fourth quarter, we delivered above expectations both in terms of record high production and record low cash operating costs for the year. These results are driven by continued strong performance from our core producing assets which have generated the highest operating cash flow for the Company to date, close to doubling operating cash flow and EBITDA compared to 2016.

I am very pleased to announce that the Board of Directors will propose to the 2018 AGM that an inaugural cash dividend of SEK 4.00 per share, totalling approximately MUSD 175, be paid out after the AGM. Based on current market conditions we anticipate an annual cash dividend of at least USD 350 million from next year.

We also announced good progress on the Johan Sverdrup project with more than 65 percent of Phase 1 completed at end of 2017 with costs reduced by 25 percent compared to the PDO. 2018 will be a very busy offshore installation year with three additional jackets, two platform topsides and the export pipelines, progressing the field towards first oil in late 2019. We will also work with our partners to submit the PDO for Phase 2 in the second half of 2018. Our recently announced increase in reserves is another positive update, led by particular success at our operated Edvard Grieg field where the best estimate ultimate gross recovery of 274 MMboe at year end represents a remarkable increase of 47 percent compared to the PDO.

While I would have liked to have seen more success with our exploration activities in 2017, this is a long-term game and I remain confident in our strategy to grow organically and expect our 2018 drilling programme to allow us to continue to find new resources and to create value within our core areas.

As we move forward, our strategy remains to focus on operational and execution excellence alongside safe and sustainable practices while continuing to pursue an active organic growth strategy. The future looks promising for Lundin Petroleum and we have some very exciting years ahead of us, increasing our production significantly by the time Johan Sverdrup comes onstream. By maintaining very low cash operating costs we will be able to deliver increased free cash flows, be very active on the organic growth front and deliver sustainable dividends, thereby continuing to create long-term value for our shareholders.”

Audiocast presentation
Listen to Alex Schneiter, President and CEO, and Teitur Poulsen, CFO, commenting on the report at a live audiocast held on Thursday 1 February 2018 at 09.00 CET.

Follow the presentation on www.lundin-petroleum.com or by dialling in on the following telephone numbers:
Sweden: +46 8 519 993 55
Norway: +47 23 500 211
UK: +44 203 194 05 50
International Toll Free: +1 855 269 26 05

Audiocast link

Lundin Petroleum to release year end report 2017 on 1 February 2018

Lundin Petroleum to release year end report 2017 on 1 February 2018

24 January 2018

Lundin Petroleum’s financial report for the year end 2017 will be published on Thursday 1 February at 07.30 CET, followed by a live audiocast at 09.00 CET.

Listen to Alex Schneiter, President and CEO, and Teitur Poulsen, CFO, commenting on the report and the latest developments in Lundin Petroleum.

You can follow the presentation live on www.lundin-petroleum.com or dial in using the following telephone numbers:

Sweden: +46 8 519 993 55
Norway: +47 23 500 211
UK/International: +44 203 194 05 50
International Toll Free: +1 855 269 26 05

Link to Audiocast

Lundin Petroleum announces its 2018 budget and production guidance

Lundin Petroleum announces its 2018 budget and production guidance

23 January 2018

Lundin Petroleum AB (Lundin Petroleum) is pleased to announce its 2018 development, appraisal and exploration budget which totals USD 1.05 billion and represents an 11 percent decrease on 2017 capital expenditure. The production guidance for 2018 is between 74 to 82 thousand barrels of oil equivalent per day (Mboepd).

2018 Production Guidance
The average production in 2017 was 86.1 Mboepd, which was 15 percent above the mid-point of the original guidance and above the revised 2017 production guidance. Lundin Petroleum’s production guidance for 2018 is between 74 to 82 Mboepd with approximately 75 percent of the production contribution from the Edvard Grieg field.

Development Budget
The 2018 development expenditure is budgeted at USD 800 million. With respect to committed development projects, 2017 was the peak year of capital expenditure leading up to Johan Sverdrup first oil and 2018 development expenditure is 16 percent below the 2017 level.

1. Approximately 80 percent of the 2018 budgeted development expenditure relates to the non-operated Johan Sverdrup field (WI 22.6%) with 2018 being the peak year in terms of facilities installation for Phase 1 of the project. From inception and up to year end 2017, Lundin Petroleum’s net capital expenditure on Phase 1 amounted to USD 1.6 billion. The project is ahead of schedule with over 65 percent complete at year end 2017 and is on schedule for first oil in late 2019. The project is achieving significant cost reductions compared to the PDO estimate, with 25 percent savings to date excluding foreign exchange rate impacts, and further cost savings are anticipated with continued good progress on the project. The submission and approval of the PDO for Phase 2 of the project is scheduled for the second half of 2018 and the 2018 expenditure budget includes commencement of Phase 2 development activities including commitment to long lead equipment items.

2. The operated Edvard Grieg field (WI 65%) commenced production in late 2015 and the planned development drilling programme within the PDO has continued through 2016 and 2017 with 11 wells out of the planned 14 wells having been completed to date. The 2018 expenditure relates substantially to the drilling of the remaining three development wells with the jack-up drilling rig being demobilised in mid-2018 on completion of the planned programme.

3. Budgeted expenditure for the non-operated Alvheim and Volund fields (WI 15% and WI 35% respectively) involves the drilling of two infill wells one on each of the fields with drilling scheduled in the second half of 2018.

Appraisal Budget
The pre-tax appraisal budget for 2018 is USD 135 million.

The appraisal programme involves two operated appraisal wells in the Utsira High area in the Norwegian North Sea. One appraisal well at Luno II (WI 50%) which on success would lead to development planning and one horizontal appraisal well and testing at Rolvsnes (WI 50%), which has the potential to de-risk the significant potential in the larger basement high area. Both Luno II and Rolvsnes are possible subsea tie-back development opportunities to the Edvard Grieg facilities. Additionally, an extended well test will be conducted at the Alta oil discovery (WI 40%) in the southern Barents Sea, which involves drilling of a horizontal production well and producing to a tanker for up to two months, to reduce the uncertainty around the recovery mechanism and provide the basis for development studies.

The 2018 appraisal budget also includes expenditure on front end engineering design (FEED) and PDO studies for Johan Sverdrup Phase 2.

Exploration Budget
The pre-tax exploration budget for 2018 is USD 115 million with a total of eight planned exploration wells.

Four wells are planned to be drilled in the southern Barents Sea. One well on the Svanefjell prospect in PL659 (WI 20%) and one well on the Shenzhou prospect in PL722 (WI 20%). The remaining two wells will be drilled in the southeastern area on licences that were awarded in the 23rd licensing round, with one well targeting the deeper horizons of the Korpfjell prospect in PL859 (WI 15%) and one well targeting the shallow horizons of the large Gjøkåsen prospect in PL857 (WI 20%).

Four wells are planned to be drilled in the Norwegian North Sea on the Lille Prinsen prospect in PL167 (WI 20%) in the Utsira High, on the Frosk prospect in PL340 (WI 15%) in the Alvheim area which is currently drilling, on the Rungne prospect in PL825 (WI 30%) and on the Mandal High prospect in PL860 (WI 40%) where the Company has recently acquired a position through a series of transactions. The acquisition of PL825 and PL860 are subject to certain government and seller bank approvals.